1990 (11) TMI 174 - AT - Central Excise

Issues Involved:
1. Classification of 'Green Pack' under TI 15A(1) or TI 68.
2. Eligibility for exemption under Notification No. 182/82, dated 11-5-1982.
3. Whether mixing epoxy resin with fillers constitutes manufacture.

Detailed Analysis:

1. Classification of 'Green Pack' under TI 15A(1) or TI 68:
The Revenue contended that 'Green Pack,' a product consisting of epoxy resin mixed with organic fillers, should be classified under TI 15A(1) of the Central Excise Tariff Schedule, as it remains a resin. They argued that the product does not qualify as an article of plastic because it lacks a permanent and durable shape. The respondents, however, argued that the epoxy resin mixed with fillers does not result in a new product, and thus, it should not be reclassified or subjected to additional duty.

The Tribunal examined the process and found that mixing epoxy resin with fillers does not bring about any chemical change or result in a new product. The epoxy resin retains its original properties and functions. Therefore, the Tribunal concluded that 'Green Pack' should not be classified under TI 15A(1) as a new product.

2. Eligibility for exemption under Notification No. 182/82, dated 11-5-1982:
The Revenue argued that since 'Green Pack' should be classified under TI 15A(1), it should not be eligible for exemption under Notification No. 182/82. The respondents, however, contended that the product, being merely a mixture of duty-paid epoxy resin and fillers, should be exempt from further duty.

The Tribunal upheld the respondents' argument, stating that no new product emerged from the mixing process. Therefore, 'Green Pack' is entitled to the exemption under Notification No. 182/82, as the process did not constitute manufacture resulting in a new product.

3. Whether mixing epoxy resin with fillers constitutes manufacture:
The Revenue cited Supreme Court cases, including Shaw Wallace & Co. Ltd. v. State of Tamilnadu and Devidass Gopalkrishan v. State of Punjab, to argue that homogenization by mixing fillers should be considered a manufacturing process resulting in a new product. The respondents countered by citing various rulings and technical literature, asserting that the mixing process does not chemically alter the epoxy resin or create a new product.

The Tribunal examined the evidence and found that the mixing of epoxy resin with fillers did not result in a new product with a different name, character, or use. The Board's circulars and cited rulings supported this view, indicating that such mixing does not amount to manufacture. Consequently, the Tribunal decided that the process does not constitute manufacture, and no additional duty can be levied.

Separate Judgments:
The President of the Tribunal differed from the majority opinion, referencing a prior Tribunal decision (Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd.) that classified a similar product under Item No. 15A(1). The President argued that the principle from the Bakelite Hylam case should apply, and 'Green Pack' should be considered a new product subject to duty under TI 15A(1).

However, the majority opinion, supported by Members Ms. Jyoti Balasundaram, D.C. Mandal, and P.C. Jain, concluded that the mixing process did not result in the emergence of a new commercial product. They agreed with the original decision that 'Green Pack' should not be reclassified or subjected to additional duty.

Final Order:
In accordance with the majority opinion, the appeal was dismissed, and the original order by the Collector of Central Excise (A) was upheld.

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